Greek PM tries to build a coalition

Opposition insists upon elections

GREEK Prime Minister George Papandreou yesterday launched efforts to form a coalition government to run his country for the next four months, arguing that the move was vital to securing a new debt deal and demonstrating commitment to the eurozone.

GREEK Prime Minister George Papandreou yesterday launched efforts to form a coalition government to run his country for the next four months, arguing that the move was vital to securing a new debt deal and demonstrating commitment to the eurozone.

But Greece's opposition leader insisted on immediate elections, snubbing a government offer to form a power-sharing coalition.

The centre-right New Democracy leader Antonis Samaras spoke shortly after the socialist Pasok government called on him to join a coalition.

He described Mr Papandreou as "dangerous for the country" but did not say if he would attend negotiations with the government.

Mr Papandreou won a vote of confidence on a pledge that he was willing to step aside and form a cross-party, caretaker government.

"Co-operation is necessary to guarantee -- for Greece and for our partners -- that we can honour our commitments," he said.

Mr Papandreou, who is mid-way through his four-year term, was forced into the move by his party after he abandoned a disastrous proposal to hold a referendum on a new European debt deal.

The idea was quickly scrapped this week after throwing world markets into renewed turmoil and drawing an angry reaction from other European leaders.

The country's creditors have threatened to withhold the next critical €8bn loan until the new debt deal is formally approved in Greece.

Greece is surviving on a €110bn bailout from the EU and IMF.

It is finalising a second mammoth deal to receive an additional €130bn in loans and bank support, with banks agreeing to cancel 50 per cent of the country's debt.

Pasok officials insisted that any new government would need until late February to secure the second deal, warning that a snap poll could scuttle it.

They insisted Mr Papandreou's offer to step aside was sincere and called on Mr Samaras to urgently reconsider his party's position.